Fundamentally, understanding and measurement of poverty relies on assessment of income and has three dimensions including relative, absolute and subjective. Relative poverty is defined as a state where people can afford basic necessities even though they are still unable to maintain an average living standard in accordance to societal norms or average income levels. Unlike relative poverty, which is defined in relation to average income levels, subjective poverty is determined by personal perception while absolute poverty is similar in relation to the monetary quantification and consideration of basic necessities. However, the latter is different from relative poverty in terms of consideration of cost of living where only the essential basic needs can be fulfilled instead of comparison with average income levels. This essays discusses the various dimensions of poverty, the economic situation of the world’s most impoverished areas as well as the prevalence of a vicious cycle of poverty that leaves the poor unable to break a self-perpetuating cycle of poverty.
The World Bank (2015) defines absolute poverty as extreme deprivation of basic human needs including food, shelter and water and generally placed in dollar amounts as below the poverty line at $1.90 a day needed for survival or as the cost of living. As such, an absolutely poor person is one whose income does not allow him/her to secure the minimum basic necessities, which are conceptualized as a specific bundle of goods and services essential to fulfillment of one’s physical needs or of the family. Basically, subjective poverty relies on one’s perception; mostly when one’s actual income does not meet one’s expectations, and viewed as having developed from a need to incorporate local understanding of poverty given widespread, extreme rural poverty (Schelzig, 2005). In relation to this, billionaires who feel that they do not have enough resources may perceive themselves as poor while the extremely poor masses who only earn one or two dollars a day may feel content and hence the perception that they are not poor.
The world’s most impoverished areas are highlighted by Tasch (2015) as including Zimbabwe, and other 18 African countries, Nepal, Haiti, Afghanistan and Myanmar, among others. Zimbabwe’s economic situation, according to the African Development Bank Group (2016) is defined by elements such as weak domestic demand, tight liquidity and high public debt, poor infrastructure and various institutional weaknesses as well as an overvalued exchange rate and drought. The economy is further defined by a hostile investment climate where business startup and completion of licensing takes too long and is quite costly while private sector growth is stunted by corruption and cronyism, among other ills where the state is heavily involved in economic decisions. Statistics provided by the Heritage Foundation (2016a) on Haiti’s economic situation seems similar in relation to a burdensome business environment and political interference as well as a weak private sector and an underdeveloped financial sector even though the investment climate may improve.
Further, over 70 percent of Haiti households live below the poverty line in the rural areas which has been worsened over time by various extreme events like earthquakes, hurricanes and diseases like cholera while maintenance of income-generating activities is quite costly. Generally, the economic situation of the world’s impoverished areas are quite similar including political interference of business activities with an underdeveloped labor market and financial sector which inhibits growth of the private sector. The Heritage Foundation (2016b) reports that ‘despite efforts to streamline the procedures for establishing a business, bureaucratic impediments to private-sector production and investment still hamper the overall regulatory environment’. The country’s complex custom system, lack of trust in the banking system and various security challenges exacerbate the economic situation.
The economic situation of the various most impoverished areas in the world can be inferred as having generally persisted over time which means that poverty becomes recurrent despite any intermittent improvements. On an individual or family unit level, poor people are subjected to inadequate education and lack of access to adequate healthcare which leads to greater difficulties in breaking out of what is viewed as a vicious cycle of poverty. This situation, as explained by Mosley and Verschoor (2005) is prevalent in developing countries where ‘people are unable to take the actions which will extract them from poverty because they are poor’ as the consequences of poverty turn into causes and ultimately, a self-perpetuating cycle of poverty. The cyclical impact of the consequences of poverty can be explained in relation to how impacts like persistent and recurrent health problems including severe stress and depression can further cause poverty as the poor become dejected in their search for jobs to improve their situation.
Further, children born in poor families are also subject to these problems which, by curtailing their abilities in gaining advanced education, which is also affected by lack of financial resources, basically takes them on a path of less job opportunities which diminish chances of improving their situations. Consequences such as job loss, criminal victimization as well as eviction and homelessness generally reduces the ability of the poor, including their children, to bounce back from poverty which can be broken through advanced education which usually translates to better paying jobs (Jordan, 2004). In addition, the consequence of increasing crime tied to poverty and increasing income inequality, among other forms of inequality, also lead to persistent poverty where incarceration reduces employment chances for the convicted which increases potential for incarceration (Pager, 2003).
In conclusion, it is evident that the world’s most impoverished areas seem condemned especially given the vicious cycle of poverty that is continuously recurrent. However, commitment to enhancing educational opportunities for the poor as well as creation of job opportunities can be inferred as enhancing the break of the vicious circle.
